Grows Revenue 10%
year-over-year
Increases Agent Count and Market Share
year-over-year
Free Cash Flow Positive for Q1
2024
NEW
YORK, May 8, 2024 /PRNewswire/ -- Compass, Inc.
(NYSE: COMP) ("Compass" or "the Company"), the largest residential
real estate brokerage in the United
States by sales volume1 for the third year
in a row, announced its financial results for the first quarter
ended March 31, 2024.
"We exceeded our expectations for Q1 2024 by growing our Q1
revenue 10% year-over-year and significantly reducing our non-GAAP
operating expenses, or OPEX2,
generating positive free cash flow," said Robert Reffkin, Founder and Chief Executive
Officer of Compass. "This is the first time we have generated
positive free cash flow in the first quarter, the industry's
slowest quarter of the year, and in a historically challenging
market. In Q1 2024, we grew our quarterly market share by 26
basis points year-over-year and 35 basis points sequentially
compared to Q4 2023. We did this while continuing to invest in
growth and our technology platform, the industry's only proprietary
first-contact-to-close solution for agents."
Reffkin continued, "We continued to significantly grow our agent
base as we increased the number of principal
agents3 by 990 or 7.3% as of the end of Q1 2024
compared to Q1 2023. In Q1 2024, we added the highest number of
principal agents organically since we eliminated cash and equity
sign-on incentives in 2022. Since the close of the first quarter,
we have further increased our presence in the Southeast by
acquiring Latter & Blum, the number one agency in the Gulf
South and New Orleans, adding over
1,000 principal agents. We continue to look for accretive M&A
transactions and to attract new agents organically as we
successfully position Compass for what we believe will be
significant upside when the market begins to recover."
Kalani Reelitz, Chief Financial
Officer of Compass said, "We have built an operating structure that
is appropriate for current market conditions and has positioned us
for margin expansion when market conditions improve. In Q1 2024, we
generated positive operating cash flow of $8.6 million and free cash
flow4 of $5.9
million, a free cash flow improvement of $64.9 million from Q1 2023. OPEX for Q1 2024 was
$211.2 million, an improvement of
$32.1 million from Q1 2023 OPEX of
$243.3 million."
Q1 2024 Highlights:
- Revenue in Q1 2024 increased by 10% year-over-year
to $1.05 billion as transactions
increased 7.1%, while transactions declined by 3.5% for the entire
residential real estate market in the first quarter, as reported by
the National Association of Realtors ("NAR").
- GAAP Net loss in Q1 2024 was $132.9 million, an improvement of $17.5 million from Q1 2023. The Net loss for Q1
2024 includes an expense of the full $57.5
million proposed settlement of class action lawsuits (the
"antitrust settlement") which the Company will pay over 2024 and
2025, non-cash stock-based compensation expenses of $32.9 million, and depreciation and amortization
of $20.8 million.
- Adjusted EBITDA5 (a non-GAAP measure)
was ($20.1) million in Q1 2024
compared to ($67.1) million in Q1
2023. This is an improvement of $47.0
million or 70%. Adjusted EBITDA excludes, among other items,
$57.5 million in antitrust settlement
costs accrued in the quarter.
- Operating Cash Flow / Free Cash
Flow6 (a non-GAAP measure): during Q1
2024, operating cash flow was $8.6
million, an improvement of $64.1
million from ($55.5) million
in Q1 2023, and free cash flow was $5.9
million, an improvement of $64.9
million from ($59.0) million
in Q1 2023.
- Cash and cash equivalents at the end of Q1 2024 was
$165.9 million, and there were no
outstanding draws on our revolving credit facility.
Q1 2024 Operational Highlights:
- Platform: The Compass end-to-end technology platform
allows real estate agents to perform their primary workflows, from
first contact to close, with a single log-in and without leaving
the Compass platform. We are focused on:
- Ongoing platform integration of our title and escrow business
with expected delivery in all markets where we offer title
and escrow in 2024; and
- Continued investment and deployment of Compass AI, including a
recent release of a Prompt Library, which helps our agents get the
most use out of the AI tool by learning what to ask and how to ask
it; and
- The advanced rollout of enhanced collaboration functionality to
further increase the efficiency and productivity of our agent
teams; and
- Driving internal cost efficiencies using technology, reducing
costs in transactions operations and with external vendors.
- National market share in Q1 2024 was 4.76%, an increase
of 26 basis points compared to Q1 2023 and an increase of 35 basis
points sequentially from Q4 2023.
- Agents7: At the end of Q1 2024, the
number of principal agents was 14,591 compared to 13,601 in Q1
2023, an increase of 990 or 7.3% year-over-year.
Sequentially, when comparing Q1 2024 to Q4 2023, we had a decrease
of 92 principal agents or 0.6%. However, we had an increase
compared to Q4 2023 when excluding the more than 100 principal
agents who exited the business that had no transactions at Compass
in the last 12 months. We also continued the trend of strong agent
retention, with 96% quarterly principal agent retention in Q1 2024
(97% principal agent retention when only including agents that left
Compass who had a transaction in the last 12 months).
- Transactions8: Compass agents closed
38,449 Total Transactions in Q1 2024, an increase of 7.1% compared
to Q1 2023 (35,886). Transactions for the entire U.S. residential
real estate market declined 3.5% for the same period, according to
NAR.
- Gross Transaction Value ("GTV")9 was
$40.1 billion in Q1 2024, an increase
of 9.6% compared to Q1 2023 GTV of $36.6
billion, while the entire U.S. residential real estate
market GTV increased 3.6% for the same period, according to
NAR.
Additional information can be found in the Company's Q1 2024
Earnings Presentation, which can be found in the Investor Relations
section of the Compass website at
https://investors.compass.com.
Outlook
Q2 2024 Outlook:
- Revenue of $1.6 billion to
$1.7 billion
- Adjusted EBITDA of $55
million to $75 million
FY 2024 Outlook:
- Non-GAAP OPEX10 of $867
million to $887 million,
reflecting an increase in both the low and high ends of the range
of $12 million as a result of the
Latter & Blum acquisition closed in April 2024. The midpoint of this range equates to
$850 million for the Company's "core"
OPEX plus $15 million for 2023
accretive M&A plus $12 million
for 2024 accretive M&A.
- Expects to be free cash flow positive for full year 2024
We have not reconciled our guidance for Adjusted EBITDA to GAAP
Net loss because certain expenses excluded from GAAP Net loss when
calculating Adjusted EBITDA cannot be reasonably calculated or
predicted at this time. Additionally, we have not reconciled our
guidance for non-GAAP OPEX to GAAP OPEX because certain expenses
excluded from GAAP OPEX cannot be reasonably calculated or
predicted at this time. Accordingly, reconciliations are not
available without unreasonable effort.
For a reconciliation of non-GAAP financial measures to the most
directly comparable GAAP measures on a historical basis, see
"Reconciliation of Net Loss Attributable to Compass, Inc. to
Adjusted EBITDA", "Reconciliation of GAAP OPEX to non-GAAP OPEX"
and "Reconciliation of GAAP Operating Cash Flow to Free Cash Flow"
in the financial statement tables included within this press
release.
Conference Call Information
Management will conduct a
conference call to discuss the first quarter 2024 results as well
as outlook at 5:00 p.m. ET on
Wednesday May 8, 2024. The conference call will be
accessible via the Internet on the Compass Investor Relations
website https://investors.compass.com. You can also access the
audio webcast via the following link: Compass, Inc. 1Q24
Earnings Conference Call.
An audio recording of the conference call will be available for
replay shortly after the call's completion. To access the replay,
visit the Events and Presentations section on the Compass Investor
Relations website at https://investors.compass.com.
Disclosure Channels
Compass uses its Investor
Relations website, https://investors.compass.com, as a means of
disclosing information which may be of interest or material to its
investors and for complying with disclosure obligations under
Regulation FD. We intend to announce material information to the
public through filings with the Securities and Exchange Commission,
or the SEC, the investor relations page on our website
(www.compass.com), press releases, public conference calls, public
webcasts, our X (formerlyTwitter) feed (@Compass), our Facebook
page, our LinkedIn page, our Instagram account, our YouTube
channel, and Robert Reffkin's X
(formerly Twitter) feed (@RobReffkin) and Instagram account
(@robreffkin). Accordingly, investors should monitor each of these
disclosure channels.
Safe Harbor Statement
This press release includes
forward-looking statements, which are statements other than
statements of historical facts, and statements in the future tense.
These statements include, but are not limited to, statements
regarding our future performance, including expected financial
results for the second quarter of 2024, planned non-GAAP OPEX and
free cash flow expectations for the full year of 2024, and our
expectations for operational achievements. Forward-looking
statements are based upon various estimates and assumptions, as
well as information known to us as of the date of this press
release, and are subject to risks and uncertainties, including but
not limited to: general economic conditions, economic and industry
downturns, the health of the U.S. real estate industry, and risks
generally incident to the ownership of residential real estate; the
effect of monetary policies of the federal government and it's
agencies; rising interest rates; ongoing industry antitrust class
action litigation (including lawsuits filed against us) or any
related regulatory activities; any decreases in our gross
commission income or the percentage of commissions that we collect;
declining home inventory levels; our ability to carefully manage
our expense structure; adverse economic, real estate or business
conditions in geographic areas where our business is concentrated
and/or impacting high-end markets; our ability to continuously
innovate, improve and expand our platform, including tools and
features integrating machine learning and artificial intelligence;
our ability to expand our operations and to offer additional
integrated services; our ability to realize expected benefits from
our joint ventures; our ability to compete successfully; our
ability to attract and retain highly qualified personnel and to
recruit agents; our ability to re-accelerate our business growth
given our current expense structure; fluctuation in our quarterly
results and other operating metrics; the loss of one or more key
personnel; actions by our agents or employees that could adversely
affect our reputation and subject us to liability; our ability to
pursue acquisitions that are successful and can be integrated into
our existing operations; changes in mortgage underwriting
standards; our ability to maintain or establish relationships with
third-party service providers; the impact of cybersecurity
incidents and the potential loss of critical and confidential
information; the reliability of our fraud detection processes and information security
systems; depository banks not honoring our escrow and trust
deposits; adoption of alternatives to full-service agents by
consumers; our ability to develop and maintain an effective system
of disclosure controls and internal control over financial
reporting; covenants in our debt agreements that may restrict our
borrowing capacity or operating activities; our abilities to use
net operating losses and other tax attributes; changes in, and our
reliance on, accounting standards, assumptions, estimates and
business data; the dependability of our platform and software; our
ability to maintain our company culture; our ability to obtain or
maintain adequate insurance coverage; processing, storage, and use
of personal information and other data, and compliance with privacy
laws and regulations; natural disasters and catastrophic events;
the effect of the claims, lawsuits, government investigations and
other proceedings; changes in federal or state laws that would
require our agents to be classified as employees; our ability to
protect our intellectual property rights and our reliance on the
intellectual property rights of third parties; the impact of having
a multi-class structure of common stock; and other risks set forth
in our annual report on Form 10-K and our subsequent quarterly
reports on Form 10-Q. Significant variation from the assumptions
underlying our forward-looking statements could cause our actual
results to vary, and the impact could be significant. Accordingly,
actual results could differ materially from those predicted or
implied or such uncertainties could cause adverse effects on our
results. Reported results should not be considered as an indication
of future performance.
More information about factors that could adversely affect our
business, financial condition and results of operations, or that
could cause actual results to differ from those expressed or
implied in our forward-looking statements is included under the
captions "Risk Factors," "Legal Proceedings" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in our most recent annual report on Form 10-K and our
subsequent quarterly reports on Form 10-Q, copies of which are
available on the Investor Relations page of our website at
https://investors.compass.com/ and on the SEC website at
www.sec.gov. All information herein speaks as of the date
hereof and all forward-looking statements contained herein are
based on information available to us as of the date hereof, and we
do not assume any obligation to update these statements as a result
of new information or future events. Undue reliance should not be
placed on the forward-looking statements in this press release.
Non-GAAP Financial Measures
To supplement our
condensed consolidated financial statements, which are prepared in
accordance with GAAP, we present Adjusted EBITDA, non-GAAP OPEX,
and Free Cash Flow, which are non-GAAP financial measures, in this
press release. We use Adjusted EBITDA, non-GAAP OPEX and Free Cash
Flow in conjunction with GAAP measures as part of our overall
assessment of our performance, including the preparation of our
annual operating budget and quarterly forecasts, to evaluate the
effectiveness of our business strategies and to communicate with
our board of directors concerning our financial performance. We
believe Adjusted EBITDA, non-GAAP OPEX and Free Cash Flow are also
helpful to investors, analysts and other interested parties because
they can assist in providing a more consistent and comparable
overview of our operations across our historical financial periods.
Adjusted EBITDA, non-GAAP OPEX and Free Cash Flow have limitations
as analytical tools. Therefore, you should not consider them in
isolation or as a substitute for analysis of our results as
reported under GAAP. Because of these limitations, you should
consider Adjusted EBITDA, non-GAAP OPEX and Free Cash Flow
alongside other financial performance measures, including net loss
attributable to Compass, Inc., GAAP OPEX, operating cash flows and
our other GAAP measures. In evaluating Adjusted EBITDA, non-GAAP
OPEX and Free Cash Flow, you should be aware that in the future we
may incur expenses that are the same as or similar to some of the
adjustments reflected in this press release. Our presentation of
Adjusted EBITDA, non-GAAP OPEX and Free Cash Flow should not be
construed to imply that our future results will be unaffected by
the types of items excluded from these calculations of Adjusted
EBITDA, non-GAAP OPEX and Free Cash Flow. Adjusted EBITDA, non-GAAP
OPEX and Free Cash Flow are not presented in accordance with GAAP
and the use of these terms vary from others in our industry.
Reconciliations of these non-GAAP measures have been provided in
the financial statement tables included within this press release,
and investors are encouraged to review these reconciliations.
About Compass
Compass is the largest residential real
estate brokerage in the United
States by sales volume. Founded in 2012 and based in
New York City, Compass provides an
end-to-end platform that empowers its residential real estate
agents to deliver exceptional service to seller and buyer clients.
The platform includes an integrated suite of cloud-based software
for customer relationship management, marketing, client service,
brokerage services and other critical functionality, all
custom-built for the real estate industry. Compass agents utilize
the platform to grow their business, save time and manage their
business more effectively. For more information on how Compass
empowers real estate agents, one of the largest groups of small
business owners in the country, please visit www.compass.com.
1 Compass was ranked number one in sales volume for
2023 by Real Trends in March 2024 for
the third year in a row.
2 Non-GAAP OPEX excludes Commissions and other
related expenses, Depreciation and amortization, Stock-based
compensation and other expenses excluded from the Company's
calculation of Adjusted EBITDA. We calculate non-GAAP OPEX
annualized run rate by taking the sum of the quarter's non-GAAP
sales and marketing, operations and support, research and
development, and general and administration expenses and
multiplying it by four.
3 During the first quarter of 2024, the Company began to
report its agent statistics as of the quarter end. The Company's
Number of Principal Agents and year-over-year growth reported in
this press release is based on the quarter end count for the first
quarter of 2023 and 2024.
4 A reconciliation of GAAP to Non-GAAP measures can be
found within the financial statement tables included within this
press release.
5 A reconciliation of GAAP to Non-GAAP measures can be
found within the financial statement tables included within this
press release.
6 A reconciliation of GAAP to Non-GAAP measures can be
found within the financial statement tables included within this
press release.
7 During the first quarter of 2024, the Company began to
report its agent statistics as of the quarter end. The Company's
Number of Principal Agents and year over year and sequential change
reported in this press release is based on the quarter end count
for the first quarter of 2023 and 2024 and the fourth quarter of
2023.
8 We calculate Total Transactions by taking the sum of
all transactions closed on the Compass platform in which our agent
represents the buyer or seller in the purchase or sale of a home
(excluding rental transactions). We include a single transaction
twice when one or more Compass agents represent both the buyer and
seller in any given transaction.
9 Gross Transaction Value includes a de minimis
number of new development and commercial brokerage
transactions.
10 Non-GAAP OPEX excludes Commissions and other
related expenses, Depreciation and amortization, Stock-based
compensation and other expenses excluded from the Company's
calculation of Adjusted EBITDA, including the expense related to
the proposed antitrust settlement. We calculate non-GAAP OPEX
annualized run rate by taking the sum of the quarter's non-GAAP
sales and marketing, operations and support, research and
development, and general and administration expenses and
multiplying it by four. For a reconciliation of GAAP OPEX to
non-GAAP OPEX on a historical basis see the financial statement
tables included within this press release.
Compass,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(In millions,
unaudited)
|
|
|
|
|
|
March 31,
2024
|
|
December 31,
2023
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
165.9
|
|
$
166.9
|
Accounts receivable,
net of allowance
|
48.7
|
|
36.6
|
Compass Concierge
receivables, net of allowance
|
29.9
|
|
24.0
|
Other current
assets
|
48.3
|
|
54.5
|
Total current
assets
|
292.8
|
|
282.0
|
Property and equipment,
net
|
143.1
|
|
151.7
|
Operating lease
right-of-use assets
|
396.9
|
|
408.5
|
Intangible assets,
net
|
71.5
|
|
77.6
|
Goodwill
|
212.4
|
|
209.8
|
Other non-current
assets
|
28.2
|
|
30.7
|
Total assets
|
$
1,144.9
|
|
$
1,160.3
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
17.0
|
|
$
18.4
|
Commissions
payable
|
74.0
|
|
59.6
|
Accrued expenses and
other current liabilities
|
148.1
|
|
90.8
|
Current lease
liabilities
|
99.6
|
|
98.9
|
Concierge credit
facility
|
23.5
|
|
24.8
|
Total current
liabilities
|
362.2
|
|
292.5
|
Non-current lease
liabilities
|
394.2
|
|
410.2
|
Other non-current
liabilities
|
55.0
|
|
25.6
|
Total
liabilities
|
811.4
|
|
728.3
|
Stockholders'
equity
|
|
|
|
Common stock
|
—
|
|
—
|
Additional paid-in
capital
|
2,981.0
|
|
2,946.5
|
Accumulated
deficit
|
(2,650.7)
|
|
(2,517.8)
|
Total Compass, Inc.
stockholders' equity
|
330.3
|
|
428.7
|
Non-controlling
interest
|
3.2
|
|
3.3
|
Total stockholders'
equity
|
333.5
|
|
432.0
|
Total liabilities and
stockholders' equity
|
$
1,144.9
|
|
$
1,160.3
|
Compass,
Inc.
|
Condensed
Consolidated Statements of Operations
|
(In millions,
except share and per share data, unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
Revenue
|
$
1,054.1
|
|
$
957.2
|
Operating
expenses:
|
|
|
|
|
Commissions and other
related expense (1)
|
862.3
|
|
790.9
|
|
Sales and
marketing (1)
|
93.4
|
|
115.3
|
|
Operations and
support (1)
|
79.0
|
|
81.1
|
|
Research and
development (1)
|
47.0
|
|
48.9
|
|
General and
administrative (1)
|
82.2
|
|
34.4
|
|
Restructuring
costs
|
1.5
|
|
10.1
|
|
Depreciation and
amortization
|
20.8
|
|
24.9
|
|
Total
operating expenses
|
1,186.2
|
|
1,105.6
|
Loss from
operations
|
(132.1)
|
|
(148.4)
|
Investment income,
net
|
1.1
|
|
2.9
|
Interest
expense
|
(1.5)
|
|
(3.2)
|
Loss before income
taxes and equity in loss of unconsolidated entity
|
(132.5)
|
|
(148.7)
|
Income tax
benefit
|
0.3
|
|
—
|
Equity in loss of
unconsolidated entity
|
(0.8)
|
|
(1.5)
|
Net loss
|
(133.0)
|
|
(150.2)
|
Net loss (income)
attributable to non-controlling interests
|
0.1
|
|
(0.2)
|
Net loss attributable
to Compass, Inc.
|
$
(132.9)
|
|
$
(150.4)
|
Net loss per share
attributable to Compass, Inc., basic and diluted
|
$
(0.27)
|
|
$
(0.33)
|
Weighted-average shares
used in computing net loss per share attributable to Compass, Inc.,
basic and diluted
|
490,000,265
|
|
450,056,743
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Total stock-based
compensation expense included in the condensed consolidated
statements of operations is as follows (in millions):
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
|
Commissions and other
related expense
|
$
-
|
|
$
11.6
|
|
Sales and
marketing
|
7.9
|
|
8.6
|
|
Operations and
support
|
3.7
|
|
3.0
|
|
Research and
development
|
14.9
|
|
10.4
|
|
General and
administrative
|
6.4
|
|
11.3
|
|
Total stock-based
compensation expense
|
$
32.9
|
|
$
44.9
|
Compass,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(In millions,
unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Operating
Activities
|
|
|
|
Net loss
|
$
(133.0)
|
|
$
(150.2)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
20.8
|
|
24.9
|
Stock-based
compensation
|
32.9
|
|
44.9
|
Equity in loss of
unconsolidated entity
|
0.8
|
|
1.5
|
Change in acquisition
related contingent consideration
|
0.5
|
|
—
|
Bad debt
expense
|
0.7
|
|
1.0
|
Amortization of debt
issuance costs
|
0.2
|
|
0.2
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(12.6)
|
|
(20.9)
|
Compass Concierge
receivables
|
(6.0)
|
|
1.8
|
Other current
assets
|
6.0
|
|
3.7
|
Other non-current
assets
|
3.0
|
|
5.7
|
Operating lease
right-of-use assets and operating lease liabilities
|
(3.7)
|
|
0.2
|
Accounts
payable
|
(1.6)
|
|
(6.3)
|
Commissions
payable
|
14.4
|
|
8.9
|
Accrued expenses and
other liabilities
|
86.2
|
|
29.1
|
Net cash provided by
(used in) operating activities
|
8.6
|
|
(55.5)
|
|
|
|
|
Investing
Activities
|
|
|
|
Investment in
unconsolidated entity
|
(1.2)
|
|
—
|
Capital
expenditures
|
(2.7)
|
|
(3.5)
|
Cash acquired, net of
payments for acquisitions
|
0.4
|
|
—
|
Net cash used in
investing activities
|
(3.5)
|
|
(3.5)
|
|
|
|
|
Financing
Activities
|
|
|
|
Proceeds from exercise
of stock options
|
3.4
|
|
1.0
|
Proceeds from issuance
of common stock under Employee Stock Purchase Plan
|
1.1
|
|
1.4
|
Taxes paid related to
net share settlement of equity awards
|
(7.4)
|
|
(6.0)
|
Proceeds from drawdowns
on Concierge credit facility
|
8.7
|
|
10.6
|
Repayments of drawdowns
on Concierge credit facility
|
(10.0)
|
|
(13.2)
|
Proceeds from drawdowns
on Revolving credit facility
|
—
|
|
75.0
|
Payments related to
acquisitions, including contingent consideration
|
(1.9)
|
|
(7.9)
|
Other
|
—
|
|
(0.2)
|
Net cash (used in)
provided by financing activities
|
(6.1)
|
|
60.7
|
Net (decrease) increase
in cash and cash equivalents
|
(1.0)
|
|
1.7
|
Cash and cash
equivalents at beginning of period
|
166.9
|
|
361.9
|
Cash and cash
equivalents at end of period
|
$
165.9
|
|
$
363.6
|
Compass,
Inc.
|
Reconciliation of
Net Loss Attributable to Compass, Inc. to Adjusted
EBITDA
|
(In millions,
unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Net loss attributable
to Compass, Inc.
|
$
(132.9)
|
|
$
(150.4)
|
Adjusted to exclude the
following:
|
|
|
|
Depreciation and
amortization
|
20.8
|
|
24.9
|
Investment income,
net
|
(1.1)
|
|
(2.9)
|
Interest
expense
|
1.5
|
|
3.2
|
Stock-based
compensation
|
32.9
|
|
44.9
|
Income tax
benefit
|
(0.3)
|
|
—
|
Restructuring
costs
|
1.5
|
|
10.1
|
Acquisition-related
expenses(1)
|
—
|
|
3.1
|
Litigation
charge(2)
|
57.5
|
|
—
|
Adjusted
EBITDA
|
$
(20.1)
|
|
$
(67.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
For the three months ended
March 31, 2023, acquisition-related expenses include
$3.1 million in expenses related to acquisition consideration
treated as compensation expense over the underlying retention
periods.
|
|
|
|
|
(2)
Represents a charge of $57.5 million
incurred during the three months ended March 31, 2024 in connection with the proposed settlement of
antitrust class action lawsuits. 50%
of the proposed settlement is expected to
be paid within 30 days of the court's preliminary approval, which
the Company expects to be in the second quarter of 2024, and the
remaining 50% within one year of the court's preliminary
approval.
|
Compass,
Inc.
|
Reconciliation of
Operating Cash Flows to Free Cash Flow
|
(In millions,
unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Net cash provided by
(used in) operating activities
|
$
8.6
|
|
$
(55.5)
|
Less:
|
|
|
|
Capital
expenditures
|
(2.7)
|
|
(3.5)
|
Free cash
flow
|
$
5.9
|
|
$
(59.0)
|
Compass,
Inc.
|
Reconciliation of
GAAP Operating Expenses to Non-GAAP Operating
Expenses
|
(In millions,
unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
GAAP Commissions and
other related expense
|
$
862.3
|
|
$
790.9
|
Adjusted to exclude the
following:
|
|
|
|
Stock-based
compensation
|
—
|
|
(11.6)
|
Non-GAAP Commissions
and other related expense
|
$
862.3
|
|
$
779.3
|
|
|
|
|
GAAP Sales and
marketing
|
$
93.4
|
|
$
115.3
|
Adjusted to exclude the
following:
|
|
|
|
Stock-based
compensation
|
(7.9)
|
|
(8.6)
|
Non-GAAP Sales and
marketing
|
$
85.5
|
|
$
106.7
|
|
|
|
|
GAAP Operations and
support
|
$
79.0
|
|
$
81.1
|
Adjusted to exclude the
following:
|
|
|
|
Stock-based
compensation
|
(3.7)
|
|
(3.0)
|
Acquisition-related
expenses
|
—
|
|
(3.1)
|
Non-GAAP Operations and
support
|
$
75.3
|
|
$
75.0
|
|
|
|
|
GAAP Research and
development
|
$
47.0
|
|
$
48.9
|
Adjusted to exclude the
following:
|
|
|
|
Stock-based
compensation
|
(14.9)
|
|
(10.4)
|
Non-GAAP Research and
development
|
$
32.1
|
|
$
38.5
|
|
|
|
|
GAAP General and
administrative
|
$
82.2
|
|
$
34.4
|
Adjusted to exclude the
following:
|
|
|
|
Stock-based
compensation
|
(6.4)
|
|
(11.3)
|
Litigation
charge
|
(57.5)
|
|
—
|
Non-GAAP General and
administrative
|
$
18.3
|
|
$
23.1
|
Compass,
Inc.
|
Non-GAAP Operating
Expenses Excluding Commissions and Other Related
Expense
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
2023
|
|
June 30,
2023
|
|
September
30,
2023
|
|
December 31,
2023
|
|
March 31,
2024
|
Sales and
marketing
|
$
106.7
|
|
$
104.3
|
|
$
95.1
|
|
$
94.3
|
|
$
85.5
|
Operations and
support
|
75.0
|
|
79.8
|
|
78.4
|
|
75.7
|
|
75.3
|
Research and
development
|
38.5
|
|
32.8
|
|
34.4
|
|
33.1
|
|
32.1
|
General and
administrative
|
23.1
|
|
21.4
|
|
10.9
|
|
20.5
|
|
18.3
|
Total non-GAAP
operating expenses excluding commissions and other related
expense
|
$
243.3
|
|
$
238.3
|
|
$
218.8
|
|
$
223.6
|
|
$
211.2
|
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SOURCE Compass